Honda and Nissan are in talks to merge, which would help them compete with electric vehicle (EV) makers, particularly in China. According to reports, the two Japanese car makers agreed to explore a strategic partnership for EVs.
Speaking to the BBC, both companies said that Honda and Nissan are exploring various possibilities of future mergers to enhance each other's strengths. Many car makers grapple with profit and growing competition, and companies are shifting their focus from petrol and diesel to electric vehicles.
EV manufacturing in China is on the boom, while both Honda and Nissan are struggling in the Chinese market, which witnessed almost 70% of global EV sales in November 2024. The two brands had combined global sales of 7.4 million vehicles in 2023, but are struggling to compete with cheaper EV makers such as BYD, which has seen its quarterly revenues soar, beating Tesla's for the first time in October, reported BBC.
The merger between Japan's second and third-largest car manufacturers could be complicated for several reasons. Any deal is likely to come under intense political scrutiny in Japan, as it may lead to major job cuts. Nissan is also likely to be faced with unwinding its alliance with French vehicle manufacturer Renault.